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JAMB Principles of Accounts 2008 Question 36

Question 36

Branch Accounts

Given:
I. Cost price
II. Selling price
III. Cost plus fixed percentage
IV. Price above cost and selling price
From the information above, the prices used in charging goods to the branches are

  1. A.I and II
  2. B.I, II and III
  3. C.I, II, III and IV
  4. D.III and IV
Show the answer and explanation

Answer: B (I, II and III)

Explanation

Head office may invoice goods to a branch at cost, at selling price or at cost plus a fixed percentage.